SORL Auto Parts Reports 2007 Second Quarter Results

          Revenue Increased to Record High of US$ 29.2 Million;
      Net Income Increased to US$ 4.1 Million With a 73% YoY Growth

ZHEJIANG, China, Aug. 14, 2007 -- SORL Auto Parts, Inc. , a leading manufacturer and distributor of commercial vehicle air brake valves in China, today reported its financial results for the second quarter ending June 30, 2007.

  Second Quarter Financial Highlights

  -- Revenue increased to US$ 29.2 million, reflecting 45.1% year-over-year
     growth;
  -- Revenue from OEM's increased to US$12.0 million, reflecting 100% year-
     over-year growth;
  -- Revenue from exports increased to US$10.9 million, reflecting 22.5%
     year-over-year growth;
  -- Net income increased to US$ 4.1 million, reflecting 73.2% year-over-
     year growth and
  -- Second quarter fully diluted earnings per share were US$ 0.22.

Revenue for the second quarter of 2007 was US$ 29.2 million, a 45.1% increase as compared to US$ 20.1 million for the same period in 2006. Sales to Original Equipment Manufacturers (OEM) for the second quarter of 2007 were US$ 12.0 million, a 100% increase as compared to US$ 6.0 million for the second quarter of 2006. Aftermarket revenue from the Chinese domestic market for the second quarter of 2007 was US$ 6.3 million, an increase of 21.2% as compared to US$ 5.2 million for the second quarter of 2006. Revenue from exports was US$ 10.9 million for the second quarter of 2007, an increase of 22.5% as compared to US$ 8.9 million for the second quarter of 2006.

Xiaoping Zhang, SORL Auto Parts' Chairman and CEO, said, "We are excited to report record high quarterly revenue as our sales to OEMs doubled and growth continued to accelerate. In the first half of 2007, the Chinese heavy duty truck market demonstrated robust 58% sales growth and semi-trailer sales increased by 123%. Encouragingly, in the first half of 2007, SORL's largest customer FAW, a Fortune Global 500 company, recorded the highest unit sales of heavy duty trucks in China. We are pleased that our focus and strategy in the high-quality brake products for the heavy duty market continues to be successful. We were able to increase our production capacity while at the same time maintaining product quality to capture the market opportunities in China. Our leadership in the Chinese OEM market also helped strengthen SORL brand name and benefited our aftermarket sales in China."

Gross profit for the second quarter of 2007 was US$ 6.4 million, an increase of 37.1% as compared to US$ 4.6 million in the same period in 2006. Operating income for the second quarter of 2007 was US$ 3.9 million, an increase of 32.4% as compared to US$ 2.9 million in the same period in 2006. Net income for the second quarter of 2007 was US$ 4.1 million, an increase of 73.2% as compared to net income of US$ 2.4 million. The fully diluted earnings per share for the second quarter of 2007 were US$ 0.22 as compared to US$ 0.18 in the same period in 2006.

Total cash and cash equivalents as of June 30, 2007 totalled $5.8 million as compared to $11.1 million as of December 31, 2006. Stockholder's equity increased to $65.1 million as of the end of June 30, 2007 from $57.4 million as of December 31, 2006. The decrease of cash and cash equivalents was due to the increased working capital needs to support the Company's expanded sales to OEMs and the higher capital expenditures for capacity expansion. In early July, SORL announced a capacity expansion of 25% which included additional quality control equipment.

Ms. Zongyun Zhou, Chief Financial Officer, said, "In the second quarter of 2007, we encountered gross margin decrease mainly due to the appreciation of the Chinese currency affecting our export margin. In response to the margin erosion, we not only increased our sales to domestic China market, but also focused on supplier selection and production streamlining to lower cost and material wastage. As a result, our overall gross margin only experienced a slight decrease of 1%. We focused on leveraging our relationships with our long-term OEM customers to reach economies-of-scale and our selling expenses stabilized during the second quarter. Our effort in receivable collections also enabled us to reverse nearly US$ 234,154 of bad debt provision during the second quarter. As the Chinese government encourages domestic equipment purchase, SORL received an income tax refund of $991,133 for the purchase of domestic equipment, which has been reflected as a reduction to current income tax expense. We will continue to focus on internal cost control and rationally expand our capacity to capture the market opportunities and enjoy the favorable policies from the local government."

Recent Development

In July 2007, SORL announced that it has successfully completed the installation of new equipment to increase production capacity and to meet the growing demand from large OEM customers in China. The Company installed 10 additional die casting machines, added 47 computerized numerical control machines to the 198 machines previously in use, purchased 4 new tooling machines for the clutch servo product and streamlined the production facility to increase total capacity by nearly 25%. All equipment completed testing and has begun mass production. The Company plans to further invest in new equipment and continue to expand capacity in the second half of 2007.

Earnings Conference Call

SORL's management team will host a conference call at 8:30AM Eastern Time on August 14, 2007. A live webcast and replay of the conference call will be available at: http://www.vcall.com/IC/CEPage.asp?ID=117078 . The webcast replay will be available through August 14, 2008.

The dial-in by telephone details for the live conference call: U.S. Toll Free Number +1-877-407-8035, International dial-in number +1-201-689-8035.